Executive Briefings

How a Fortune 500 CPG Company Saved $12M by Reexamining Its Ocean Spending

By: William McNeill, AMR Research 07.16.2010

When transportation and commodity costs rise like they did from 2006 through 2008, many companies examine their logistics spending to look for ways to save money. Should they switch carriers? Should they find alternative sources closer to home? Are carriers actually charging the agreed-upon rates?

But when these same costs fall, there's temptation to relax these cost savings efforts. Companies incorrectly assume that because transportation costs are so low, it's not worth their time to examine rates and compliance, thinking the savings won't justify the effort. But this couldn't be more wrong.

When transportation and commodity costs rise like they did from 2006 through 2008, many companies examine their logistics spending to look for ways to save money. Should they switch carriers? Should they find alternative sources closer to home? Are carriers actually charging the agreed-upon rates?

But when these same costs fall, there's temptation to relax these cost savings efforts. Companies incorrectly assume that because transportation costs are so low, it's not worth their time to examine rates and compliance, thinking the savings won't justify the effort. But this couldn't be more wrong.